(Reuters) – Two Houston-area men have been criminally charged with trying to fraudulently sell 50 million N95 respirator masks they did not actually possess to a foreign government at an inflated $317.6 million price, the U.S. Department of Justice said on Tuesday.
Paschal Eleanya, 46, and Arael Doolittle, 55, were accused of negotiating to sell the masks at five times the list prices set by the manufacturer, 3M Co.
According to a Nov. 19 indictment, the defendants expected to personally collect as much as $275 million from the transaction, with the remaining money going to their “broker” and the government’s own representatives.
The U.S. Secret Service broke up the transaction before it was completed, according to the indictment, which includes text messages from both defendants.
Eleanya and Doolittle were charged with two counts of wire fraud, each of which carries a maximum 20-year prison term, and conspiracy.
The Justice Department did not identify the foreign government. It said Eleanya turned himself in to authorities, while Doolittle is scheduled to be arraigned on Wednesday.
A lawyer for Doolittle did not immediately respond to a request for comment. Eleanya’s lawyer could not immediately be identified. The Justice Department had no immediate additional comment.
Doolittle was separately charged last month with trying to defraud 21 investors out of $1.2 million in oil and gas transactions. He has pleaded not guilty in that case.
3M, the world’s largest maker of N95 masks, has filed at least 19 civil lawsuits to stop price-gouging, counterfeiting and other improper sales practices for its masks.
Most of 3M’s N95 masks cost less than $2, and the St. Paul, Minnesota-based company has pledged not to raise prices because of the coronavirus pandemic.
(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis)
